Should They Stay or Should They Go?
Keywords:
SECRJ, Southeast Case research Association, The Beanery Coffee Roasters, retail visibility, fixed costs, retail location, Management Accounting principles, Entrepreneurial Skills, caseAbstract
The owner of The Beanery Coffee Roasters, Kurt, had an opportunity to move his small wholesale/retail coffee roasting operation to a new location nearby. By moving to this location with improved retail visibility, he would increase retail sales and expand community engagement opportunities, but would also increase overhead costs and incur the fixed costs of moving. The roasting operation would be subject to uncertain new ordinances in the new location and he would give up the freedom of operating in a neighborhood with few restrictions and no neighborhood complaints about smoke discharge from the roasting process.
On the face of it, moving to a better retail location seemed to be a no-brainer. Were there hidden risks or overhead costs that had not occurred to him? The new location seemed to be a good one; would it be good enough? Students evaluate the choices using Small Business Management principles or Entrepreneurial Skills principles, and quantify the choices using Management Accounting principles.
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